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Management Dimensions in 2030

Helmut F. Karner*

“Management is out of date. What ultimately constrains the performanceof your organization is not its operating model, nor its business model, butits management model.”

Gary Hamel, 2007

 

Here are three views of the future we might find ourselves living in 2030.One is what I would call a pessimistic view, one is a realistic view, and thefinal one is an idealistic view. Which one would you prefer?

The pessimistic view

We still have not completely overcome the effects of the financial crash of2013 (as a consequence of the 2008 financial crisis). The sovereign debts,the currency crisis resulting in a severe budget cutbacks, and fiscal austerityhave stopped the growth of private and business investment for a long pe-riod and have destroyed huge amounts of social capital and private wealth.Not really much has changed in business. Why should it? As there has beenvirtually no change in the management methods and tools used during thepast one-hundred years, there was continuous momentum to extend the in-ertia. The main organizational principles still stem from 1776 (Adam Smith,The Division of Labor) and 1912 (Frederic Taylor, Scientific Management),budgeting is still being done as it has been in the past 100 years, financialsuccess is still being measured by ridiculous Profit & Loss Accounts and Bal-ance Sheets. People still stand on the wrong side of the equation (as costs,not as assets), and important investments (like R&D, human capital devel-opment, branding, etc.) are still being counted as costs.

IT is still perceived as a disabler of productivity (see Does IT Matter?NickCarr, published in 2004), knowledge is not being applied properly (“If weknew what we know, we would be three times as profitable,” Lew Platt, ex-HP). Companies still don’t exploit inventions and intellectual property(“Siemens uses less than 10% of their patents in their own products,” HenryChesbrough, 2006).

The industrial society still prevails in the business approach taken in devel-oped countries, in the way we apply labor law, how we organize workthrough jobs, how we regulate working hours. (“To our counterparts at theend of the 21stcentury, today’s struggle over jobs – protection and creation– will seem like a fight over deck chairs on the Titanic,” William Bridges,1995).

The realistic view

Jeff Immelt’s prediction of 2009 has come true: “The global economyand capitalism will be ‘reset’ in several important ways. It’s an emotional,social, economic reset. The government will be a regulator; and also anindustry policy champion, a financier, and a key partner.” The interna-tional Federal Public Institutions have won back primacy over the negativeeffects of excessive profit making in business and the finance industry. Fi-nancial institutions now serve business and society, rather than manipu-lating and exploiting the community. Although it has taken more than twodecades of regulatory efforts, this is a major accomplishment towards a“just” society.

The progress in business is mixed: the generation of the baby boomersand their conserving spirit are gone, but the Generation X still largely incharge now has not done much about innovating business models andpractices either. The technological changes (social networks, Enterprise2.0, Open Government) have created the means for Generation Y to ap-proach business differently – in a more collaborative, open way. So,business models have changed in part, networked communities of pro-fessionals thrive, the “gift economy” shines through; but a substantial por-tion of business and management still sticks to the old paradigm, hangingonto power, hierarchy, closed systems, and unsocial behavior.

Companies are now predominantly organized in processes, in smaller,networked units. Intangibles (Baruch Lev, 2004) find more and more theirreflection in financial accounts, and the 6thKondratieff Cycle (nanotech-nology, new materials, health care, and new cognitive sciences) hasgiven a new spirit and leap to markets, products, services, and businessmodels.

The idealistic view

We have learned from the last financial crash in the early two decadesof this century, and have finally moved in the direction of a sustainablemodel of the financial industry: the proceeds from growth and wealthare equally divided between workers, consumers, company profits andfinancial gains. Business models have become quite sustainable; Corpo-rate Social Responsibility has become a prerequisite for success in themarkets. The shock of peak oil in 2015 has finally caused a (very late)change in behavior towards global warming, our consumption of nature. We now treat people more correctly in society and business: no longeras “assets” which can be disposed of, nor as “human resources”, whichcan be used up. The concepts of “employer” versus “employee” aregone: each person invests her HUMAN CAPITAL, but expects a properReturn on Investment in exchange (Thomas O. Davenport, 1999).

We measure financial success correctly now, by properly valuing intan-gible assets, intellectual property, and community values. We treat cus-tomers as partners, establish longer lasting relationships, and shareresponsibilities among each other.

We organize in networks; approach the “End of the Corporation”(Bartlett-Ghoshal 1998, The End of the Era of Organizational Man), ex-ploit the power of “COINS” (Collaborative Innovation Networks, PeterA. Gloor, 2006), work in “Open Business Models” (Chesbrough, 2006;Lafley/Charan 2009), have established models of “Wikinomics” (DonTapscott, 2006). We have made major progress to eradicate povertythrough concepts of “social business” (Muhammad Yunus, 2010 andC.K. Prahalad The Fortune at the Bottom of the Pyramid, 2004).

Many of the “Moon Shots for Management” (Gary Hamel and the“Renegade Brigade”, 2009) have become reality, including:

  • Ensure that the work of management serves a higher purpose.Management, both in theory and practice, must orient itself to theachievement of noble, socially significant goals
  • Fully embed the ideas of community and citizenship in manage-ment systems.There’s a need for processes and practices that reflectthe interdependence of all stakeholder groups.
  • econstruct management’s philosophical foundations. To build or-ganizations that are more than merely efficient, we will need todraw lessons from such fields as biology, political science, and the-ology.
  • Eliminate the pathologies of formal hierarchy. There are advan-tages to natural hierarchies, where power flows up from the bottomand leaders emerge instead of being appointed.
  • Reduce fear and increase trust. Mistrust and fear are toxic to inno-vation and engagement and must be wrung out of tomorrow’s man-agement systems.

It is a business world where fun, not power, prevails; where selfishnessand intrigue have given way to honesty, humility, mindfulness, moralcourage and sustainability; where people are liberated, where theyapply “creative disobedience” (Rupert Lay, 1996) where nonsensereigns.

What a pity that I will not be fully active anymore by then. My gener-ation has missed the opportunities.

_________________________________________________________________________

*Prof. Helmut F. Karner is an educator and a management consultant. He is also C:F Advisory Board member.

 

 

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Dan Croitoru

Dan Croitoru

It is interesting how we still expect different output by providing the same input. In order to create change we have to change first and aim towards the idealistic view of the future.

27th August, 2010 @ 12:04 PM CEST

Metka Ule Novak (Management)

Metka Ule Novak (Management) | C:F staff

I like the idea of increasing trust and reducing fear to enable innovation in future.

1st September, 2010 @ 1:14 PM CEST

Dharmesh Bhadja

Dharmesh Bhadja | Action team

as i am a physician this part of management was not so easy for me to deal... i am very thankful to the author for making me confident for THE future management - how it should be and the things that really NEED TO KNOW...

28th October, 2010 @ 7:43 PM CEST

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The role of leadership is to find, recognize and secure the Future.

Statement from the book by Joel A. Barker

At the rate the speed of innovation currently increases, by 2030, the ability to absorb and analyze an ever growing flow of information will be the quality that separate ssuccess from failure.

Statement from the book by Aleksandrs Trofimovs, Latvia

In 2030, management will have gone through what will appear as a revolution,because the “noughty”(i.e., 00’s) managers relying only on profit and not on the cost of making such a profit, will appear lazy, if not stupid. Firms like Nestlé and BP will have to be run by serious managers who value their reputations, and ratings agencies will “trash” firms that do not attend to such issues as the care and attention to ecology.

Statement from the book by David Bevan, Academic Director, Eabis,Belgium

A leader should be honest,practical, and willing to listen to what every person has to say and consider that opinion as an option.

Statement from the book by Milica Shulevska, Macedonia

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